>> this sunday, the politics of the economy. have americans lost faith in the president and his party to dig the country out of recession? >> the hole the recession left was huge. the progress has been painfully slow. millions of americans are still looking for work. >> can the white house do anything before november to put people back to work? and who is right in the debate about your taxes? i'll explore the president's thinking and go inside the white house's campaign strategy with senior adviser to the president, david axelrod and then nine years after 9/11, what's behind the new wave of anti-muslim sentiment in america? has the president helped or hurt by weighing into controversies

about an islamic community center and mosque in lower monta manhattan and a florida's pastor threat to burn a holy koran. we'll talk with rudy giuliani. finally, our political roundtable weighs in on the legacy of the 9/11 attacks, religious tensions in america and the outlook for the midterm race. with us the bestselling author of "no god but god: the origins, evolution and the future of islam" reza aslan. former white house press secretary to president clinton, dee dee myers, republican strategist mike murphy and ron brownstein of the "national journal." captions paid for by nbc-universal television good morning. after a weekend of start and stop announcement, news from iran this morning that jailed american sarah surer will be

released on $500,000 bail along with shane bower and josh fattal. she's been accused of spying and detained in an iran prison last summer. joining me from des moines, iowa, the president's top political adviser, david axelrod. welcome back to meat meet, mr. axelrod. >> thanks, david. good to be here. >> what about this news from iran? when will she be released and will it happen this time? >> obviously we're hopeful and encouraged by these news but there have been starts and stops in this before and until that actually happens, you know, we're on a wait and see basis. >> as far as bower and fattal and their release, is there any progress there? >> you know, david, i won't comment on any of that right now because we're in a sensitive stage here. obviously we're hopeful that we can get these folks out. they should never have been in jail in the first place. they are being held under false

pretenses and they should be released. we're working very hard to see that that happens. >> let me turn to politics and the domestic agenda particularly the economy. the president announced plans for some additional infrastructure spending to stimulate the economy. he also would like to give business tax breaks that the corporate world has responded favorably too. should these become law and be passed, what impact could they have by november? >> i don't know that -- the goal is not to have impact by november. the goal is to have impact. and to get this economy moving. i know everyone in washington is looking at the economy through the prism of the election but when people are sitting around their kitchen table, they're not looking at the nbc news poll. they're looking at bills they can't pay. they're concerned about their future. they want to know that we have policies that will not only get the economy accelerating in the short run but will lay a foundation for future growth. >> the white house has an economic strategy but the white

house is also tactical and it is indeed looking at the november election when you announce some of these policies at a point when most people agree it's not going to get passed by november. david in "the wall street journal" wrote this on wednesday. obamanomics. the president's moves are late. there was ample warning early this year that economic recovery lacked vigor. had these policies been proposed in the screen, congress might have adopted them and the economy would be feeling the lift by now. instead the president looks like he checked the economy off the to do list prematurely and now regrets that. response? >> i strongly disagree with that. we've been doing things all along to accelerate this economy earlier in the year we passed a hire act to give tax breaks to

those firms who hire unemployed workers. we've been trying for months as you know to pass additional tax breaks for small businesses on top of the aid we've given them and expand lending. that's upheld by politics in the united states senate. we hope we will break the logjam. it's time to stop playing games, a republican said to his own party. we agree with that. we've done things right along to keep this recovery moving in the right direction. we've had eight straight months of positive job growth in the private sector. we need to accelerate that pace and that's the reason the president has proposed these additional ideas. we're ready to pass them tomorrow if the republican party in the senate allows it. if they pass the small business tax bill and if they want to move on others, we're ready to go. if they want to wait until after the election, we'll have to wait until after the election.

>> when you talk about the economic progress that has or has not been made, there's been critics who have looked at how the president has talked about the economy and we compiled some of what the president has said about the economy going back to last april. let's look at that. >> what you are starting to see is glimmers of hope across the economy. that's why we're turning this economy around. i'm convinced that we can see a light at the end of the tunnel. this month's jobs numbers are a sign that we have begun to put the brakes on this recession. the worst may be behind us. >> here is what the website from the white house tauted earlier in the summer. it was recovery summer as it was billed by the white house in campaign across the country as administration kicked off events across the country. here's the economic record which is still quite bleak. 9.6% unemployment. 16 months of straight 9% or higher unemployment.

54,000 jobs lost in august. 14.9 million unemployed. 6.2 million of which are long-term unemployed. and just today in "the new york times" a reminder of the real cost of this. a story that we see as the economy tumbles, numbers of families in shelters rise. you've had a rise in the number of families actually going into homeless shelters. it's a question of the president's rhetoric versus reality. are those things out of sync? >> no, they're not out of sync. obviously in april we were on a slightly greater scheme than we were over the summer because we had a fiscal crisis that took 15% off the stock market and caused businesses to retrench further but reality remains that when we talk office, we were losing 800,000 jobs in the month of january when we took over from the last administration. we lost 4 million jobs in the last six months of the last administration. we've had eight months of private sector job growth. we have to accelerate. listen, the hole that this

recession created was huge. 8 million people lost their jobs and that's on top of a decade in which the middle class was treading water and there's a lot of pain out there and a lot of -- people are frustrated. they deserve to be frustrated. we're frustrated. we want to move this economy forward more quickly. we would like some cooperation to do it. the real issue since you put this in a political context, the real issue for people this november is going to be what direction do we want to go? the other side and you have pete sessions on your show, head of the congressional campaign committee for the republicans, said we want to go back to the very same agenda we had before this president took office. that agenda was a disaster. that agenda turned the clinton surplus into a record deficit of $1.3 trillion. gave free reign to special interest and at the expense of the middle class of the economy led to the greatest economic

collapse since the great depression. why would we want to go back to that? >> as a practical matter, when does the economic team think that obama administration economic policies will have a sizable impact on the unemployment rate in this count country? >> david, there was a study that was released just a couple weeks ago by a couple economists, one republican and one democrat, some leading economists in the country that said the things we did not only saved or created 3.5 million jobs, 3.5 million more people are working, but we would have lost -- if we hadn't taken the steps we had taken, we would have lost twice as many jobs as we did during the recession. the hole was tremendous. the damage is great. it took ten years to create that problem. >> my question is, when is the expectation that the unemployment rate will come down in a meaningful way? >> well, we're moving toward that with every step that we take.

obviously 750,000 new private sector jobs created this year is a start. we need to accelerate that. it will come with growth. that growth will come with steps we've taken and it will come with a revitalization of the middle class which is why of course we want to extend tax cuts for the middle class. >> the fundamental belief of the american people has to be that things are going to get better. this administration said that with the stimulus plan you would have unemployment at 8%. that proved not to be the case. you had some real big bites of the legislative apple with successes. health care reform, financial regulation, a large stimulus plan which the president argued was necessary and yet here we stand the latest nbc news "wall street journal" poll disapprove of the president's handling of the economy at 56%. this is more damning. the judgment of whether people are optimistic about the future and here it is from the same poll, will things get better or worse or stay the same? 51% think they'll stay the same or get worse. this was a president, mr.

axelrod, who was elected on a promise of transformation of washington and better handling of the economy. isn't the lack of confidence in him on the economy the ultimate judgment that you were trying to avoid? >> no. look, i'm not worried about the judgment of him. i'm worried about moving this economy forward. that's what he's worried about. we walked into something that nobody anticipated. we knew the situation was bad. no one knew how bad it was. it was the greatest downturn since the great depression. and our job since that time is to work day in and day out to move that forward. the economy is growing now instead of shrinking. we're gaining jobs instead of losing them. we have to accelerate that. people are discouraged. they have gone through not just a hard recession but for many people they've been treading water for a decade and salaries and wages have flat lined and so on but the answer is to do the array of things that we have to do to invest in our infrastructure, to give business the incentive to grow, to give

middle class people money to spend to get our economy moving again and to have the best educated workforce and do things to expand exports and all of the things that we're working on will move this economy forward. of course people are discouraged. it's been a tough time. >> if this is an election -- >> i want to say one thing. >> this is a question about choices. americans have lost confidence in this president's direction to fix the economy. >> listen, you look at your same poll and i've looked at your poll obviously and the thing that people said that made the most uncomfortable candidate was whether they supported the economic policies of george w. bush and you listen to -- and policies that existed before this president took office. you listen to what john boehner, the man who would be speaker has said about what he wants to do about the economy. he says he wants to restore those tax cuts for companies that ship our jobs overseas.

he wants to cancel the obama tax cuts that were part of the recovery act for the middle class and raise taxes on 110 million families and borrow $700 billion to give millionaires and billionaires another tax cut and add to our deficits and then this morning we read that the lobbying community has rallied to boehner for speaker campaign and spent millions of dollars to go back to writing the rules themselves. they say we don't need to buy access to mr. boehner. we already have that. we want him in power so we're in power. we don't want to go to the same policies and practices that drove our economy into a ditch, that punished the middle class and led us to this catastrophe. we have to move forward. >> let me ask you a specific question about this debate about tax cuts. you mentioned leader boehner for the republicans who is saying in an interview that in fact he would support the middle class tax cuts to the extension of

which is what the president wants. he said don't hold those hostage. i'm asking if there is any room to compromise with republicans to extend even if it is for two years as your formerly departed budget director called for, those on tax cuts from the bush era. >> if you read carefully what our budget director said, he said he would prefer we didn't move forward on the upper income tax cuts because he doesn't believe they're stimulative and that we can afford it but for political reasons we might have to accept it. let's lay that aside. but mr. boehner -- no one believes that -- they called the last set of tax cuts temporary. they'll continue -- i think we have to assume they'll keep pushing this forward. let me make one point clear. what we're proposing is a tax cut for 100% of americans up to $250,000 of their income. if you make under $250,000 you get a tax cut on your income. if you make more than that, you

get it up to $250,000. if you're a millionaire, you get what everybody else gets up to $250,000 and not $100,000 a year that mr. boehner wants to give us. we just can't afford it. and really what we ought to do is as the president said agree on the middle class tax cuts. let's not hold them hostage while we debate whether we're going to give this very small number of people at the top a tax cut that we can't afford. >> it was striking to me hearing the president on friday when he talked about the economy and the choice in this election. he did not mention anything in his opening remarks about health care reform, which he and you and others have billed as signature achievement of this administration and you said once people know more about health care, the more popular it will become. we see reporting this week in politico that in fact there aren't any democrats who supported this who are out there touting that vote and only those

that opposed it are touting it in the election. senator chuck schumer was on the program in march and this is what he said about health care. >> i predict by november those who voted for health care will find it an asset and those who voted against it will find it a liability. >> the opposite has turned out to be true. why has the president failed to win the argument about the benefits of health care reform? >> well, first of all, i don't think health care is driving this election, david. i think the economy is driving this election. people have anxiety about that economy. i tell you -- they don't -- you know why we worked on health care? health care is and was a huge problem in this country in terms of the cost of it to people and the government in terms of the relationship between people and their insurance companies. no one wants to go back to a situation where if you have a pre-existing medical condition you can be deprived of coverage. no one wants to go back to a

situation where if you get seriously ill you can get thrown off your insurance. seniors don't want to go back to paying more for prescription drugs. no one is calling for that. if the republican party wants to make the argument that that's what we should do, then they should make it openly and honestly. >> this administration made the argument that part of economic recovery was passing health care reform. part of getting the economic fiscal house in order in the government was health care reform but democrats are not campaigning on it because it's so politically toxic. you said that wouldn't be the case and that it would get more popular and not less. >> i think that health care over time is going to become more popular but people are focused on this economy right now. they have anxiety about this economy. that's what is driving the vote right now, david. and at the end of the day you mentioned the fiscal, congressional budget office and every objective observer has said this will save a trillion dollars over the course of the

next couple of decades or more in budget deficits and that's an important part of it. we have to think long as well as short. >> rahm emanuel, chief of staff, if he were to take some early steps toward raising money looking into it, can he do that with president's blessing while he's still chief of staff? >> i think the president is being clear that rahm is chief of staff and will be focused on his duties as chief of staff. he's looking at it -- he loves the city of chicago. no question about it. he has a hard decision to make because he has a lot of responsibilities here and he enjoys working with this president and serves his country in this capacity but he'll make a decision and after he makes his decision he'll make subsequent decisions about when it is appropriate to begin doing that campaigning. >> david axelrod, thank you very much.

enjoy the steak fry this afternoon in iowa. >> looking forward to it. thank you. we turn to a republican candidate for the 2008 presidential election and of course the mayor of new york city at the time of the september 11th attacks, rudy giuliani joins me now from 30 rockefeller plaza in the heart of manhattan. mr. mayor, welcome back to "meet the press." >> good morning. how are you, david? >> i'm well. thank you. i want to talk about a tumultuous week leading up to the ninth anniversary of the 9/11 attacks. as you look at the controversy surrounding what happened, this debate over the mosque and community center in lower manhattan, the threat to burn the koran by a florida pastor, and this anti-muslim sentiment in the country on the ninth anniversary, what's happening? what's behind that? >> i can't tell you exactly what's behind it. something like this probably could have happened at any time. these controversies happening right now i don't think are necessarily connected to each other. few have told me four years ago

someone wants to put a mosque up near ground zero, i would have told you that 80% of the family members would be very offended by that and very hurt by that for a whole host of reasons having nothing to do with islam phobia but having to do with how they feel this is sacred ground and that a muslim center there would not be appropriate. some place else would be perfectly appropriate. if you told me people would have gotten upset if someone wanted to burn the koran three four years ago, same thing would have been the case. why these things are happening now, they could be connected or unconnected. i analyze them both the same way. the imam has a right top put the mosque there. freedom of religion gives him that right. the minister has the right to burn the koran. the same amendment of the constitution gives him that right. the first amendment. in either case, common sense and a real dedication to healing

that these men of god would have would tell you not to do that because you hurt too many people. >> you mentioned the imam who wants to burn a community center in lower manhattan who appeared on cnn this week. he issued a warning of sorts about this debate moving forward and its impact. let me play a portion of that. >> if we move from that location, the story will be that the radicals have taken over the discourse. the headlines in the muslim world will be that islam is under attack. and i'm less concerned about radicals in america than i am concerned about radicals in the muslim word. >> can you concerned about that warning? >> i'm concerned about the imam doing that. i think that tactic is not the kind of tactic i would have expected from an imam who is featured as a man of co

consilation. he's about being open and transparent about what he's doing and how he's doing it. the bad imam said america is an accessory to september 11th. america has more muslim blood on its hands than vice versa. he can't condemn hamas as a terrorist group and will not be transparent about where he gets money and how he's getting the money and has not been open at all about this and now we have the imam who tells us if he doesn't get his way, there could be significant and dangerous violence. those are very, very strong words and to enter a sort of suggestion of a threat into this, i worry about this as the kind of tactics that he pursues. >> you talked in stark terms, however, about moving forward with this community center and mosque saying that if you are in fact committed to being a healer, you don't go forward

with a project but if you are a warrior you do. are you actually suggesting that he's a warrior because of his interest in building this? >> i'm suggesting that he seems by his actions to be more interested in confrontation than in healing. actually, if you go on with the rest of the that quote, i was talking about the pope and the issue he faced several years ago with a convent. many people in the jewish community felt it was incensive. popes and nuns would say we'll stay here. we have a right to do that. let's have that confrontation and bring it on. the pope being a man of healing wanting not to make things more painful for those who have had too much pain, he said let's pull it back. he has the same choice. the people he's hurting most are the families who have lost loved ones down there. they don't all feel that way but 80% to 90% feel extremely hurt

by this and it's making them relive the pain. they should be be the ones to get the most consideration. not the imam, for tnot me, not president, not the mayor. >> let me move to the war against terrorism. you said after 9/11 you said the sooner and faster we find osama bin laden the safer the world is going to be. he still has not been captured. he's an iconic figure for sure. is he more than that? are we not safe after 9/11 until he's captured? >> i would still say the same thing. the fact is that we will not be safe even after he is captured. there's a little more symbolism to it now than there would have been then. there was more reality to it then. by that i mean at that time he was much more active and had much more flexibility to conduct a further attack. we've pinned him down a lot more with efforts of the bush and obama administration in this area have been both effective in

circling him in but there's a tremendous symbolic value in catching him and bringing justice including his ability to recruit and in any war and however you want to describe this war, it's a different kind of war but it's a war. you capture a significant leader and you have affected the morale of the other side and maybe that's even more exaggerated in a situation like this. >> i want to ask you about america's fight against terrorist. it's out in "the washington post" this morning. i want to put a portion on the screen. let's stop playing into bin laden's hands. the goal of organized terrorist attack is to go to more powerful enemy into a response and over the past nine years the u.s. blundered into the 9/11 snare with one overreaction after another. bin laden deserves to be focus but much of what he has achieve swr

ed we have done to ourselves. bin laden has watched his relatively tiny and all but unanimous organization turn into the most recognized international franchise since mcdonald's. could any enemy of the united states achieved more with less? how do you respond to that? >> there's a bit of a policy problem for the united states here that if you do you're damned and if you don't your damned. in the period of time when we weren't paying as much attention to bin laden and al qaeda, they were attacking us almost every other year in the '90s culminating in the attack of the "uss cole" in which we didn't respond because we weren't clear who the enemy was. since we've had a change in policy, going on offense against islam terrorism which bush began and in the case of afghanistan

the obama administration are continuing and at least at home we've been able to avoid a repetition of the september 11th attack which i have to tell you nine years ago today which would have been the day after september 11th when i was still mayor, wi was being briefed we were going to be attacked many times. i can't tell you the reason we haven't been attacked in the way everyone predicted but the big response that ted is talking about is keeping them on defense. i wouldn't pull that away without analyzing it very closely because in my view the more you have islamic extremism on defense, the safer we are. the more you give them room to plan, maneuver and work out attacks, the more dangerous we are. >> this is a threat that will be with the united states for a long time but it doesn't have to dominate our foreign policy. do you agree or disagree with

that? >> agree completely. this is an enemy, it's a significant enemy, but it's not an enemy like naziism and communism in the sense that it's a worldwide issue. it can create horrible attacks maybe worse than nazis or communism but it's not an all n encomp passing enemy. we have to give attention to issues with asia and africa and issues with europe and south america. we can't have people in south america feeling we're not paying attention to issues in south america because we're concentrated on the terrorism issue. that's a real difficult thing for both the bush administration, the obama administration or any administration to carry out. >> i'm glad the president said that. that becomes a warning to this administration, please pay attention to other things with equal force. >> i want to ask you a political

economy, an economic question, back in 2004 on this program, this is a comment you made about your republican party. >> the republican party is a much bigger tent than people give it credit for. we have a lot of what i guess you call moderate republicans. >> do you still think that's the case? >> i love when you go back. you can find me saying almost anything. you can probably contradict everything i said on your show at one time in the past. >> do you think republicans as a minority party in washington have acted constructively and responsibly during this president's administration? >> i do. the president gave not much choice. the republicans suggested of changes in health care that the president rejected out of hand. i'm pretty conversive with that debate. tort reform. if the president had included tort reform which he took off the table immediately in health care, he probably could have gotten eight to ten republicans on board. >> hold on.

that's a big assumption and much bigger debate. my more narrow question is what you said in 2004 holds which is the republican party a big tent party with moderate republicans in its ranks? >> i'm still here. >> do you think the tide has turned in the republican party and it's become something different? >> no. i think the republican party has always had this tension as the democratic party has when you have a group of people that are significantly ideological and then you have other people that are more center right and i think we have a significant number of those and candidates running right now that are easily described that way. i think we're as broad a political party if not broader than the political party but in a different spectrum. >> who is the most prominent voice in the republican party? >> john boehner would be the most prevalent voice because he's the one that has the best

chance of becoming a national leader in an official way over the next two to three months. >> all right. i have to try to pin you down before you go on this point. the standings are a little tight in the american league east after the yankees dropped a game to the rangers last night. up by half a game over the rays. what's going to happen here, mr. mayor? >> well, i have to confess that my wife went to high school with the manager of the rays so this is an issue in my home. we'll be in the playoffs with them one way or another. we're the winner and they're the wild card or they're the winner and we're the wild card we'll be playing five or seven games with them and i think our experience and our pitching staff and our playoff hardened players like jeter and a-rod, i think we win. >> all right. mr. mayor, we'll leave it there. thank you very much. up next, the legacy of the 9/11 attacks. religious tensions in america, the economy and the outlook for the midterm race. our roundtable weighs in on all

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surreal week in many ways with the florida pastor and what's going on in lower manhattan. we look at the views of islam in "the washington post" poll unfavorable now at 49%. eclipsing even the unfavorable rating in october of 2001. and you look at the flag burning and some of the reactions we've seen to the debate we've been having here going on in the middle east and afghanistan and pakistan, burning flags. you see this kind of thing. this is hearts and minds campaign that general petraeus is waging in afghanistan and elsewhere in pakistan and there are setbacks to it. reza, you wrote this as part of an mpr commentary at the end of the summer. the fear is that it may lead to the same kind of radicalization among muslim youth in the u.s. that we have seen in europe. are we in danger of proving al qaeda right? i'm a liberal progressive american muslim but when i see

that bigotry against my faith, my very identity has become so common place in america that it is a wedge issue in the elections and i can barely control my anger. i can't imagine how the next generation of american muslim youth will react to provocations. what's behind this? >> part of it has to do with the controversy surrounding the islamic community center in lower manhattan. it is true that there are those that oppose the project because they do believe that it will disturb the sensitivities of some 9/11 victims, so i do want to remind everyone in this country we do not define our constitutional rights by how they disturb people's sensitivities. you only have to spend a few minutes at ground zero yesterday and to take in this international anti-muslim zealous that gathered together to spout the most vile racist bigotry to know that this is about something more.

anti-muslim sentiment in this country is at unprecedented levels. we know this. what's truly disturbing is how mainstream it's becoming with politicians on both sides and i would have to include the former mayor in this category openly and explicitly associated american muslims with al qaeda. what i would like to know from not just the former mayor but from the people who keep talking about the islamic community center, what is it that this multifaced, multistory community center being led by an american imam that two republicans, republican and democrat, have used as an ambassador to the muslim world, cultural ambassador to the muslim world, what does that have to do with al qaeda? the answer is simple. islam. let's call a spade a spade for a moment. if you are painting 1.5 billion people with the same brush of violence and extremism, you're a

bigot. and i think what's disturbing is the way that that's become part of the discourse. >> it's become politicized. 9/11 has been politicized in different ways since then. in a different way now. >> we have a lot of threats tangled together. both president bush and president obama for reasons you cited in your article have said that it is in our interest to make clear and no one more forcefully than president obama in the last few days that the u.s. is at war with terror but we're not war with islam. that's been viewed as essential to send that message to the world. the lesson we're seeing in this controversy over the mosque is not all americans agree. with president bush out of office, bush expecting those sentiments suppressed that kind of argument in the republican party. if you look at polling out recently in "time" magazine, republicans said that muslims should not be able to run for president. the flip side of this is that to some extent the sentiment is

being driven by what you describe as already happening. the successor to the 9/11 commission, the national security preparedness group came out with a powerful study this week that talked about cases of terrorism being part of a new pattern in terms of becoming the major security threat to the u.s. and that in many cases it is radicalized american muslims. fringe element of the overall population but nonetheless real a in things like the times square and texas shooter fueled sentiment on the other side which may in fact produce -- >> if some of the demonization of the other because of what the country is going through right now, we're in an economic situation as i pointed out on the front page of "the new york times" more and more families going into homeless shelters this is not just a policy debate about taxes and spending it's about real impact on real lives around the country, is that in part what's fuelling this and can president obama make a gesture like going to a mosque

saying that something he admired about what president bush did saying it's not a war against islam, can he do something like that? >> there's no question that throughout our history when times have been bad in economic declines and depression or in times when we've been at war, we've been susceptible to vilifying some group of people whether turning the japanese americans during world war ii and many other instances across our country so there's no question that fueling it and people saw political opportunity in fueling it. there's political opportunity and that's why we see that yesterday for the first time in commemoration of 9/11 and so you have sort of economic downturn meets political opportunity and it's created this really unfortunate -- >> mike murphy, rudy giuliani in the last couple months has been so crit alical of this administration's war on terror

but he's saying th-- >> you can argue about tactics and foreign policy emphasis because of many things. it's something that's a national consensus on and that's part of the problem with this debate now on islam. the elections aren't about islam. one of the problems is there becomes a phony ekwif lance. so religion is a weapon to them. we're trying to be a civil society and so i think we have to be careful to keep our consensus of no big rotries. i think we're a tolerant country and we're the good guys. >> let's talk about the mid terms and the economic power of this recession. dee dee myers, i take you back

now to 1993 and the documentary, "the war room." this was james carville. 7 out of 10 americans know somebody who is currently out of work in this recession. this is the poll that the national journal, ron brownstein's group has worked on. this is the war room and the famous message from james carville back then. >> talk about things that matter to people. you know, it's the economy, stupid. >> it's the economy, stupid. here we are again. and yet people's connection to the investigation and people have been laid off. is the president connecting on this issue? >> i think he's trying to. i think the results sort of speak for themselves. he's having trouble connecting on it and having trouble making people believe that he's done enough and he starts every conversation by saying we've done a lot but we haven't gotten where we need to be and we need to keep working. in 1994 we had a terrible midterm and lost both houses of congress and the economy was

improving and people are still feeling -- >> part of the problem in '94 you talked about, ron, the chaos theory. democrats couldn't get anything done. democrats have got an lot done, mike murphy. financial reform, health care reform, a big stimulus. this is the point i was asking david axelrod about. there's a lack of confidence now after they have seen what the president has done in things getting better. >> i think they have a lot of things done. they haven't gotten a lot of results that the american people think have been effective. what happened when the president ran as a centrist and became more liberal with house democratic definition of that, he lost the country and lost the independents and some of the working class white voters he had. people now think that after two years of almost complete power in washington, he's had more power man many presidents have had because he's had all the houses and tremendous mandate and he hasn't delivered. people feel the pain and they want a change and there's clear there will be a change. >> we'll put up on the screen.

midterm history for first term presidents is bleak for a president in power as we see it revealed here. a lot of losses across the board in our recent history. 2002 the exception after 9/11. what's happening here? >> pretty wide distribution. the first thing i learned this morning is if you are at 9.6% unemployment and it's not going down, there's not a good answer to any question. in fact, people are looking at over 60% of the country saying we're on the wrong track. what's not changing is people's report of their own current circumstances but the level of optimism about the future. you talked about the poll down from 55% saying the economy will get better over the next year. 70% said that in the spring. that's the real cloud hanging over democrats. i would say quickly there are two distinct strains that are emerging here. there's an ideological backlash going on around low 40% of the electorate. beyond that obama has a problem with performance and results.

that's affecting even groups that were into the core of this coalition in 2008 and are not necessarily drawn towards these republican solutions. if they have hope of avoiding full scale disaster in november, it's about more of a choice tan a referendum which is difficult to do in midterm elections. >> health care reform, they have not won the argument there. you can look at the polling. this was written in new york post on friday which i thought was interesting. health care bill gave a party in need of a defining issue a marching order for the next several years and before passage this was a signature achievement. tough if you're a president and democrats who want run on that achievement in mid terms. >> they didn't win the argument over health care or financial reform and obviously the president wants to make this election about either moving forward or moving backward but

as ron was saying most people feel they're standing still. they don't see backwards and forwards as two options. there's not a lot of room here. >> what more account president do do to save the house? >> he will have to contribute to the effort to target carefully. it's a brutal and ugly time in the party when you have to triage. you can raise money which he's done effectively and campaign in a few districts but that's not the silver bullet. he don't save the house by campaigning for specific members. he can focus on the economy as we've seen him do more aggressively particularly this week. >> you said on this program last year you described the republican party as russia 1919. i do't forget these quotes. warlords in republican party running around and nobody is in charge. do you think republicans have united in a way that can return

them to power and be effective? >> president obama has become a great savior. if he stayed in the center he could have put us back no a long time but he went hard left and there's been reaction to his policy across the board and they'll lose. i told republicans to brag less and organize more but every poll now is historic. the only thing the president can do is build a time machine and go back in time to save an outcome that i don't know how bad it will be for democrats but people are mad. they don't believe this administration has delivered. it will be a different washington. >> i want to look at one specific race out in california. we all have california connections. i'm an l.a. native. we all have a california connection. the governor's race in california, mike murphy, you are working with meg whitman, the republican, former head of ebay and here's the poll. it's a tight race. she's ahead two percentage points over jerry brown, former governor of course. this is, ron brownstein a tight race in a state in a lot of economic trouble. >> absolutely. it's been the biggest blue state

in the country overwhelming margin for president obama. it is easier for a republican to win as a statewide level than at the federal level because some of the polarizing social issues and wedge issueshat can trip up at the federal level aren't as relevant in state elections. meg whitman has spent a lot of money this summer and not put away jerry brown. the fact that he's hanging around where he is with all of the negatives that he carries shows that he's really in this. >> what's your view of the race? >> i think meg will win because she fits california well. it's a jobs program. people know she knows how to create jobs. that's number one issue. they know she's from the silicon valley delivering results which is what we need in sacramento. jerry brown is a time machine of failure. >> why does meg want to be governor of california? why would anyone want to be

governor of california? >> california is so expensive. it's about getting a message out against the entrenched public employees and i believe it. i live there. >> we have to leave it there. we'll see what happens. we'll watch in california and around the country. thanks to everybody. we'll be right back after this brief station break. [ female announcer ] we know jerry brown was mayor of oakland,

but what were the results? fact: brown promised to improve schools. but the drop out rate increased 50%, and the state had to take over the schools. fact: the city controller found employees paid for 22,000 hours... they never worked. fact: brown promised to cut crime. but murders doubled, making oakland the 4th most dangerous city in america. jerry brown. he just can't deliver the results california needs now. before we go, a quick programming note. tune into msnbc this afternoon at noon and 3:00 p.m. for a special rebroadcast of brian williams report "new orleans an

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